P2P platforms start to raise investor returns
Peer-to-peer lending platforms have begun to increase their investor returns, amid rising inflation.
Over the past week, both Loanpad and Crowd2Fund have announced rate rises.
Loanpad has been steadily increasing its investor rates over the past few months, with two more rises planned. From 1 September, the P2P property lending platform will pay 3.1 per cent to classic account holders, up from three per cent at present, and premium account rates will rise from 4.2 per cent to 4.3 per cent.
From 1 October, the returns on both of these accounts will increase by a further 0.1 per cent each.
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Crowd2Fund recently raised its target interest rates to up to 16 per cent to attract more investors. Loans are now being offered on the Crowd2Fund website with target returns of between 12 and 16 per cent.
Meanwhile, earlier this year European P2P lender Bondora reported that its returns had exceeded its targets during the first six months of the year.
By May, the actual rate of Bondora’s yearly portfolio performance had increased from 13.3 per cent to 14.6 per cent – almost five per cent above its target rate of 9.7 per cent.
At least some of the recent rate increases have been attributed to rising inflation and the recent increases in the Bank of England base rate.
“As inflation is high, and base rates have risen several times this year already, we believe that our rates to investors and borrowers alike needed to increase,” Loanpad chief executive Louis Schwartz told Peer2Peer Finance News.
“We continue to monitor rates and will provide further updates in due course.”
In a blog on its website, Crowd2Fund said that the increase in target rates is intended to “reflect the market rate”.
Read more: Loanpad announces further investor rate rises